Public Services and Procurement Canada
Lessons Learned from the Consolidation of Department of National Defence and the Canadian Armed Forces Staff through the Carling Campus Initiative

Lessons Learned from the Consolidation of Department of National Defence and the Canadian Armed Forces Staff through the Carling Campus Initiative (PDF, 1.3Mb)

March 19, 2019

Acknowledgements

This study was undertaken by a team of 4 consultants, all of whom brought a unique and valued contribution. Goss Gilroy Inc. would like to thank these team members, including Sandy Moir, James Hamilton, Laura Conroy and Marianne Corriveau.

The study team would also like to thank Public Services and Procurement Canada, the Department of National Defence and the Canadian Armed Forces, Shared Services Canada, Treasury Board Secretariat of Canada and Brookfield Global Integrated Solutions who supported our work throughout the assignment.

Of course, no study of this kind can be undertaken without the generosity of those who participated in interviews and workshops. Many of those we consulted for the study were asked to provide additional documents, clarification and participate in the validation of the findings. We thank them for their insights and commitment to continuous improvement in their organizations and the Government of Canada as a whole.

1.0 Introduction

Goss Gilroy Inc. (GGI) was hired by the Office of the Chief Audit Executive at Public Services and Procurement Canada (PSPC) to undertake a Study of Lessons Learned from the Consolidation of the Department of National Defence and the Canadian Armed Forces ( DND/CAF) staff as part of the joint PSPC- DND/CAF Carling Campus initiative. The study was undertaken to inform other current and future large scale transformation initiatives that will rely on infrastructure as a lever to drive change. As such, PSPC would like to thank its partners that participated in this study such that PSPC can benefit from these lessons learned for future initiatives.

This study was launched in late February 2018 and data collection was completed in September 2018.

1.1 Objective of the study

The objective of the study was to gather lessons learned related to the management of the initiative from 2010 (or acquisition of Carling Campus) until present day^{Footnote 1}. This involved capturing stakeholder perspectives on what did and did not go well throughout the planning and ongoing implementation of the initiative. The lessons learned study included how the work of PSPC, Shared Services Canada (SSC), DND/CAF, as well as Treasury Board Secretariat, impacted the overall success of the joint management of the initiative. The study considered the overall contextual factors influencing the scope of the initiative which includes being a large, complex, multi-year assignment with changing requirements.

1.2 Methodology

Based on a planning phase that included key informant interviews and a review of documents, GGI designed and implemented a methodology that included a series of interviews and a half‑day workshop. We also consulted and reviewed many different documents from a variety of sources. Appendix A provides more details regarding the methodology for the study.

During the examination phase, every effort was made to obtain the views of all relevant stakeholders. Public servants from PSPC, DND/CAF, SSC and Treasury Board Secretariat were consulted. The study design sought representation of public servants at all levels of the organization, including employees, managers and executives. We also consulted many from outside of government including representatives of private sector entities involved in the initiative (vendors and consultants). In all, we spoke with almost 30 individuals with varying degrees of responsibilities related to the initiative.

To conduct the analysis, the study team met several times to discuss and consolidate the main findings and identify the lessons learned. All the lessons contained in this report are based on the consultations and supported with the team's knowledge of leading practices in these areas. It was critical for the study to validate the views and opinions of respondents. We did this in three ways:

1. We tested and validated concepts from documents, interviews and a workshop
2. As we synthesized and reviewed the results, we sought out areas of agreement and disagreement and identified where opinions were held by many or a few or by only certain types of participants. Any areas of disagreement or confusion were followed up with additional validation through a review of documents and judgment based on our professional expertise and experience. Also during the analysis of the evidence, the team brought their considerable and varied experiences to help interpret what we heard and to apply known leading practices
3. We shared preliminary findings with the project's Director General Interdepartmental Steering Committee (DGISC) and the Senior Project Advisory Committee (SPAC)

2.0 Background and Context

2.1 The issue

The 2008 DND/CAF Accommodation Strategy stated a clear desire to consolidate DND/CAF's strategic and administration functions. DND/CAF personnel have been distributed in many locations across the National Capital Area (NCA), mainly leased commercial space. These locations have been costly to lease, refit, secure and renew on a recurring basis. To address this strategic objective and these inefficiencies, in 2008, the Government began evaluating sites for the purpose of consolidating DND/CAF operations in the NCA. In 2010, the auction of the Carling Campus, the former headquarters of Nortel, presented Public Works and Government Services Canada (now PSPC) with an exceptional real estate opportunity to purchase a facility that represented considerable value for money for Canada.

Once the Carling Campus was purchased, PSPC began working with the DND/CAF and SSC on consolidating a large part of the DND/CAF's headquarters operations at the Carling Campus. An undertaking of this scope presented a number of unique challenges. Though some of these were anticipated and their related risks mitigated for the Carling Campus initiative, others were unanticipated and have resulted in both delays and additional projects costs^{Footnote 2}.

2.2 The initiative

The infrastructure aspects of the initiative, which consists most significantly of the refit of the Carling Campus and consolidation and relocation of DND/CAF personnel at Carling Campus (referred to in this report as the ‘refit and relocation project'), is expected to generate savings for Canadian taxpayers as well as an increase in the operational efficiency of DND/CAF operations. The consolidation will see DND/CAF move from over 47 offices to approximately 7 major locations in the NCA, which is expected to produce $750 million in net savings in accommodations costs over a 25 year period, plus an additional $160 million for DND/CAF in cost avoidance. These savings are based on the reduction of higher cost leased accommodation in the Ottawa downtown core occasioned by the movement to a crown-owned suburban location. This major refit and relocation project represents one of the largest office consolidations in Canadian history^{Footnote 3}. The infrastructure aspects of the initiative also include Government of Canada (GC) Workplace 2.0 accommodation standards and a modern work environment, as well as provide an opportunity to better leverage new technologies and new Information Management/Knowledge Management policies and practices.

The initiative served as a catalyst for DND/CAF to reconsider its use of infrastructure as a lever to operate in better alignment with and contribute to the achievement of its Defence Priorities and Strategic Outcomes. These included a new security and strategic environment with new organizational structures, renewed governance model, new business practices, and new Human Resources (HR) policies, which were driven by other initiatives such as the Security Review Initiative and the Defence Renewal Initiative.

The Carling Campus initiative was also viewed as an opportunity to contribute to tri-partite objectives (between PSPC, DND/CAF and SSC) of “streamlining project planning, implementation and operations”, in a manner consistent with the GC's objective to “utilize sustainable development initiatives to the Departments' maximum fiscal and cultural advantage^{Footnote 4}.

As noted, the initiative consists primarily of a number of refit and relocation projects to be delivered in three phases. The infrastructure aspects of the initiative and the refit and relocation projects are included in the scope of this engagement. The Security Review and Defence Renewal Initiatives were not included in the scope of this engagement.

2.3 Context

The opportunity

In 2010, the Government of Canada (GC) (through PSPC, then known as PWGSC) was presented with the opportunity to purchase the former Nortel Carling Campus located at 3500 Carling Avenue, Ottawa, Ontario. On November 18, 2010, the Treasury Board approved the acquisition of Carling Campus from Nortel Networks Technology Corporation and Nortel Networks Limited, which was effectively purchased on December 17, 2010. Three years later on December 12, 2013, PSPC, DND/CAF and SSC presented a joint request for the approval of planning, design and implementation authorities to launch the Carling Campus Initiative.

The Carling Campus opportunity came at a time when PWGSC (now PSPC) had been evaluating sites to support DND/CAF's identified need to undergo a transformation in terms of its use of space and resources within the NCA. While the DND/CAF's existing 40 plus locations were in the Ottawa/Gatineau core and thus closer to Parliament and to Other Government Departments, and made it easier to employ staff from Quebec and Ontario, the 40 plus locations were leased at capacity, presenting expansion challenges, and were costly to operate^{Footnote 5}.

As well, DND/CAF was dissatisfied with how their employees located in Ottawa-Gatineau were fractioned and how this negatively impacted the department's horizontal integration, efficiency and decision-making ability. For DND/CAF, the transformation initiative was driven by a need for increased quality and speed of decision-making, a need for increased intra-departmental collaboration and organizational effectiveness.

The initiative allowed the consolidation and relocation of at least one third of DND/CAF full time equivalents in the NCA – a number then estimated at 8,500 employees – from numerous downtown core locations (from over 40 across the NCA) to a single suburban campus. The move was expected to start in December 2015 and to be completed by June 2019. The initiative also included change-management support to impacted DND/CAF staff. In its end state, the Carling Campus workspace will conform with Workplace 2.0 combined with modern IT infrastructure and security features. 

2.4 Project delivery of refit and relocation projects

Roles of key players

The Project charter, which covered the refit and relocation projects that form part of the infrastructure aspect of the Carling Campus initiative, as well as other documentation (such as the DND/CAF Performance Measurement Plan) define the roles of the three main departments, PSPC, DND/CAF and SSC, as follows:

• PSPC is the “mandated custodian of the Campus and the Single Project Authority, accountable to Treasury Board for project delivery”
• DND/CAF is the “tenant of the buildings and grounds, responsible for the definition of requirements, and remains accountable for the information technology infrastructure within the DND/CAF legislative mandate.” DND/CAF is also responsible for the physical security of the site
• SSC is the “provider of information technology infrastructure services within the SSC legislative mandate to support National Defence's business operations”

Implementation details

The three priorities identified in the project charter were cost, time and scope. The charter also highlighted a number of anticipated challenges relating to the significant scope and scale of the initiative, procurement timeframes, design and construction security protocols, the differences in departmental motivators of the parties involved (PSPC, SSC, DND/CAF), and departmental initiative requirement implementation interdependencies^{Footnote 6}. The Project Charter identified a governance structure, financial structure (including cost-sharing principles), and other considerations about management approach, dispute resolution mechanisms, requirements and solutions, security requirements, a communication strategy, reporting mechanisms, and processes for project charter updates.

PSPC applied its National Project Management System methodology to ensure efficient, effective and standardized project management ^{Footnote 7} and delivery. A number of key documents were developed to support the initiative design and delivery (e.g., joint management plan, performance management plans, etc.) along with the fulfilment of numerous reporting requirements.

Initial scope and timeline

The refit and relocation projects comprise the refit of 11 buildings totalling 2.5 million square feet, and was estimated to cost over $500M, and requires over 5 years for completion ^{Footnote 8}. Over time, less space was required for special purpose freeing up this space to include additional workspaces. The refit of and relocation was intended to occur in three phases:

• Phase 1, which included four buildings (buildings 6, 7, 8 and 9), was designed to host 3,741 workspaces with occupancy planned to start in 2017
• Phase 2, initially intended to host 3,900 workspaces, included buildings 2, 3, and 5, as well as a pavilion and a service centre. After design, however, the Phase 2 buildings were found capable of hosting 4,382 workspaces and were designed as such. Occupancy was initially slated for 2018-2019
• Phase 3, which included building 10, was designed to host 1,323 workspaces, rather than an anticipated 1,190 with occupancy anticipated by 2019
• In total, there would be 9,446 workspaces, as opposed to the anticipated 8,500

Costs

The refit and relocation project tracked three sets of costs: purchase costs, fit-up costs and transition costs. Purchase and fit-up costs are costs associated with the purchase and renovation of the campus itself. Transition costs are costs associated with carrying costs such as on-going operations while waiting for the relocation to happen. According to a joint tri-departmental presentation to SPAC, the total project authority (purchase, fit-up and transition) has evolved to reach $837.6M (excluding Harmonized Sales Tax (HST) by February 2018 , the third time the project was presented to TB. The overall performance was deemed to be on time, on budget and on scope. The deck presented the following overall status / budget update as of December 2013, June 2015 and February 2018 ^{Footnote 9}.

As of July 1st, 2018, the value of the fit-up work done was $316.2M, or 58.8% of the budgeted $537.3M, with:

• Phase 1 complete (budget spent at 94.2%)^{Footnote 10}
• Phase 2 in progress (budget spent at 41.2%)
• The largest outstanding spending in Phase 3 (5.2% of current budget)^{Footnote 11}

Budget and schedule amendments

Approval for a change in schedule was also received with a delay for the final move-in date for all three phases from March 2019 to late Fall 2019. Reasons for the schedule change, as articulated in the status reports to TB^{Footnote 12}, include:

• Upgrades to DND/CAF's security policies (resulted in $19.6M additional costs)
• Accelerated procurement process combined with low quality design packages for Phase 1 (resulted in $12.2M additional costs)
• Revised Information Technology (IT) security requirements due to the inability to use existing IT pathways (resulted in $4.3M additional costs); and
• Increased IT costs (by $1.6M), offset by decreased IT fit-up costs (by $6.4M)

Approval for a change in schedule was also received with a delay for the final move-in date for all three phases from March 2019 to late Fall 2019. Reasons for the schedule change, as articulated in the status reports to TB, include:

• Phase 1 move-in date delayed nine months (from December 2015 to September 2016) due to the combined effect of the slower than planned ramp-up process for the design consultant and construction manager as well the recapitalization work (glazing and seismic upgrades) that had to be added to the Phase 1 buildings scope of work
• Phase 1 move-in date further delayed three months (from September to December 2016) due to the large number of changes and corrections resulting from Buildings 8 and 9 being tendered with 66% design packages; and
• Phase 1 move-in date further delayed one month (from December 2016 to January 2017) due to DND/CAF's decision to wait until after the Christmas and New Year break to ensure a better user experience

These delays resulted in the Phase 2 post tenders construction schedule and the Phase 3 preliminary schedule that suggest that the Carling Campus Project move-ins will resume late Fall 2018 with a view for all move-ins to be completed late Fall 2019.

Procurement and competitive process

PSPC contracted out the work using a Real Property-2 (RP-2) procurement vehicle, whereby the GC identified a requirement for the services of a company to provide Real Property Management, Project Delivery and Optional Services for PSPC buildings located on the Carling Campus and Tunney's Pasture Campus. The Request for Proposals went out on MERX on September 21, 2012. Bidders engaged in the competitive process were only required to submit a single bid for both campuses. The contract was issued to the successful bidder on June 3, 2013.

The bid was won by Brookfield Global Integrated Solutions (BGIS), who then became the sole vendor group responsible for the management of construction and retrofitting operations of the Carling Campus facilities. This included the hiring of subcontractors involved in various aspects of the site renovations and upgrades required for the campus to host DND/CAF's employees and meet departmental security requirements. As such, BGIS hired and oversaw the work of a consortium of NORR Architects and HOK (hired as principal architect) and EllisDon Construction (hired as construction manager).

3.0 Lessons Learned

Through the analysis of the consultations and documents, the study team has identified eight lessons in six major areas as outlined in the figure below. Most of these lessons have been learned and implemented through continuous improvement throughout the management of the Carling Campus initiative. The value of this work will come from using the lessons for other infrastructure initiatives in the future. Perhaps the one area that remains an area for improvement for the Carling Campus initiative is outcomes management where there has been little integration of the project outcomes and initiative outcomes.

Each of the lessons is described in more detail below. In each case, the lesson is outlined and supporting evidence subsequently presented.

3.1 Governance and oversight

Governance

Governance is a tool to increase accountability of all players. The need for governance exists anytime a group of people come together to accomplish an end^{Footnote 13}. Governance determines who has power, who makes decisions, how other players make their voice heard and how accountability is rendered^{Footnote 14}. Governance is a critical function in any transformation initiative or large scale project. Effective governance should include proper levels of decision-making, delegation and sign-off.

Lesson 1: Effective governance design should support decision-making at appropriate levels and ensure partners deliver on their respective accountabilities, in accordance with the Project Charter.

The Carling Campus initiative integrated major transformational objectives for DND/CAF, both operational and strategic, with a large construction refit and relocation project managed by PSPC and IT infrastructure managed by SSC. As a result, many accountabilities were shared by the partners and there were significant interdependencies between the separate accountabilities of each partner. Further, governance of the infrastructure initiative also included other stakeholders to the project, including Treasury Board Secretariat, vendors, advisors, etc.

The governance structure for the infrastructure aspects of the initiative included representatives from all three organizations and consisted of:

• The Executive Steering Committee
• The Interdepartmental Senior Project Advisory Committee
• A Director General Interdepartmental Steering Committee
• A Joint Project Management Committee
• A Senior Project Manager Committee
• Project Team Committees, dealing with Schedule, Design, Construction, Site Design Development, Furniture Focus, Telecommunications, Security, Budget, etc

According to many of those consulted for this study, the multiple levels of governance has minimized delays and prevented the need for all matters to be escalated to senior management.

Observations related to managing shared accountability to help maximize buy-in and participation of partners and support discharge of respective accountabilities include:

• Maintaining a co-chair or rotating chair model for governance committees
• Maintaining a strong secretariat function to establish and distribute agendas, take and distribute records of decisions, and tracking of action items
• Clarifying roles and expectations of other stakeholders in regular attendance

It was also observed decision-making and problem solving related to the refit and relocation projects, and communication between partners was enhanced by the co-location of PSPC's, DND/CAF's, and SSC's project management office. Using a single integrated project management schedule was identified as important to identifying interdependencies, monitoring overall progress, and addressing issues.

We understand DND/CAF developed a governance structure to support the change management accountabilities of DND/CAF for the Carling Campus and its other renewal initiatives, although the study did not examine these.

Oversight

Project oversight offers an ongoing independent and comprehensive review of a project, including its people, processes and effectiveness. Project oversight begins during the planning phase and continues until the project's completion^{Footnote 15}.

Lesson 2: Mechanisms to assess project progress should be implemented from project initiation to provide project managers, stakeholders and oversight bodies with updates on and insight into progress.

Currently, Treasury Board receives semi-annual progress reports on the refit and relocation project that are informed by semi-annual Project Health Reviews (a special type of review that is conducted between predetermined project gates). The integrated project team semi-annual progress report was first issued in 2015 and replaced the annual report and mid-year dashboards previously submitted to Treasury Board^{Footnote 16}.

PSPC engaged the services of a third party to conduct the semi-annual Project Health Reviews. These Reviews assess three factors – time, scope and budget^{Footnote 17}. The assessment process followed the Treasury Board Secretariat Reviewer's Handbook for discovery and analysis.

Periodic lessons learned exercises are/were also completed by each of the participating departments as well as by the integrated project team and by BGIS. The purpose of the lessons learned exercise led by BGIS was to identify significant successes achieved (and how to replicate them) as well as how issues, problems, and other setbacks were encountered, how they were overcome, and how they could be avoided in the future^{Footnote 18}. Conducting ongoing lessons learned exercises were seen as team building opportunities by some stakeholders, which allow for better mutual understanding of participants needs.

It is the view of the study team that implementing mechanisms that form an integrated part of the project delivery from project initiation are an effective way to provide updates/reflections on progress to help inform project managers and key stakeholders, as well as provide insight into progress to oversight bodies.

3.2 Authorities and approvals

Lesson 3: Complexity should be minimized when designing the approach for seeking expenditure authorities, where possible.

According to the TB Policy on the Management of Projects^{Footnote 19}, in exercising oversight, TB Ministers limit the expenditure authority exercised by departmental ministers, requiring those ministers to bring expenditures that exceed those limits to TB Ministers for approval. Based on a department's project management capacity and the assessed project complexity and risk, project approval limits are then established. In the case of the Carling Campus initiative, given the planned expenditures and project complexity, all departments had to seek TB Minister approval for expenditure authorities (EAs).

According to the policy and those from Treasury Board Secretariat interviewed, there are no requirements dictating the approach departments take to seek authorities except they must be calibrated with the assessed project risk and complexity and approvals can only be granted for project phases that have been appropriately defined and assessed.

In the case of the Carling Campus initiative, the approach for seeking approval from Treasury Board for authorities was divided into three phases, each of which required separate EAs and Treasury Board Submissions. Further, for each of these three phases, authorities were sought for each of the three departments (PSPC, DND/CAF, and SSC) involved in each of the three phases. As a result, nine separate budgets were approval for the Carling Campus Initiative.

The reason why each department sought separate EAs when both DND/CAF and SSC provided funds to PSPC to execute work on their behalf was not discussed during consultations for this study. However, the interviews with Treasury Board Secretariat personnel revealed that it is not uncommon for projects to be structured where each participating department seeks its own authorities.

The approach designed to support the authorities for the Carling Campus Initiative was unanimously described as being complex and creates challenges to managing the financial aspects of the Initiative. As well, according to most, the benefits from using this complex authority approach were not evident.

Although funding within a phase could be reassigned to future years, by having separate EAs and Treasury Board Submissions for each phase, authorities cannot be transferred between EAs. In the case of the Carling Campus initiative, while the EA1 was exceeded, at the time of writing, EA2 is expected to be underspent. However, as mentioned, authorities could not be transferred without Treasury Board approval.

The administrative burden of managing authorities and approvals under this approach was identified by study participants as heavy given that each of the nine budgets require individual management.  Each of these nine budgets required the development of a substantive estimate, once information was available and known with sufficient certainty, prior to seeking approval. This also required ongoing management and reporting of nine budgets at the departments and to Treasury Board. Changes involving expenditure levels (delays or accelerations) within each of the phases required each department to adjust cash flow statements accordingly to each of the nine budgets, as appropriate. Further, all three departments must account for their authorities both departmentally and to Treasury Board despite the fact that a portion of these were transferred to PSPC via Memorandum of Understanding (MOU) or recovered through Specific Service Arrangements. Consideration of alternative approaches might explore opportunities for fewer budgets, while still maintaining sufficient accountability reporting.

This approach also created financial management challenges unique to initiatives that cover a number of years. It is generally expected, and was indeed the refit project team's experience, that priorities and GC policies change over time (such as the level of DND/CAF security required or the Greening of Government policies). The limited flexibility created by this approach of nine budgets, created challenges in managing the financial impacts of changing priorities and policies.

Managing the financial aspects of complex infrastructure initiatives can also be complicated by the fact there is a great deal of unknown information, which was particularly the case with Carling Campus where Building Condition Reports described several buildings as being in poor quality. For example, the phase-based approach to the approval of authorities ignored known additional expenditures in the development of Phase 1 budgets.

The consequences of these various layers of complexity created by this approach of nine budgets and three EAs have been:

• Significant investment of time and resources to write multiple Treasury Board Submissions and other authorities design documentation for one Initiative
• Significant investment of time and resources for budget management at all three departments
• A requirement for overly complex MOUs between the players
• A requirement to establish complex communication and financial reporting protocols between the departments

Some possible alternative approaches that might be pursued for future complex initiatives to reduce complexity that could be considered include:

• Having a lead agency (in this case, PSPC) responsible for the management and reporting of the budget for the refit and relocation projects. While there could still be multiple authorities, funds would flow from the three departments to PSPC early on and PSPC would be solely responsible for the expenditure management and reporting to senior management and Treasury Board
• Structuring the initiative with one department seeking expenditure approval to exercise expenditure authority from Treasury Board. The lead agency (in this case, PSPC) would then define, identify and seek Treasury Board approval for the EAs for each phase when sufficient information is known. Regular reports to the Senior Project Advisory Committee and Treasury Board Secretariat should be in place to ensure sufficient accountability for expenditure authority attribution to departments
• Defining phases by time rather than by building. There would be more certainty about the expenditures anticipated in the next two years, for example, rather than the various activities required to fully move into four buildings. This would also allow for an evolution of requirements from the client as well as the policy and standard perspectives

The extent to which these alternatives can be fully exercised for future complex initiatives should be explored by PSPC with Treasury Board Secretariat, Office of the Comptroller General (policy owners) and Treasury Board Secretariat, Government Operations Sector, to leverage flexibilities in the project management policy and the design of Treasury Board submissions. This engagement needs to occur at the earliest stages of the initiative to ensure funding authorities are simple and also reflect the necessary oversight.

3.3 Change management

According to leading practice, successful change management requires buy in from those affected by the change, and support for staff and managers to help them adapt to change. Change leadership is also critical to success. Change leadership requires leaders to take both accountability and responsibility for the change, that is, accountability for outcomes management and responsibility for driving the change operationally.

Lesson 4: Change management should be treated and resourced as a priority from the earliest phase of the Initiative to support successful transformation.

Given the transformation objectives associated with the Carling Campus initiative, change management had to be championed and owned by DND/CAF since they were the organization undergoing the change and only they could facilitate that change throughout the lifecycle of the initiative. This study focused on the change management activities for the Carling Campus Initiative and did not include study of activities related to the Security Review and Defence Renewal Initiatives.

Change management for the initiative had a number of important features:

• Early planning and consideration of change management
• Support from organizational leaders
• Clear roles/responsibilities and governance
• Communications
• Regular monitoring of progress; and
• Individuals' adoption of the change

The study team found change management was generally well done by DND/CAF. DND/CAF's approach to each of these features is described below as they present good practices for change management.

Early planning and consideration of change management

Front-end change management activity implemented by DND/CAF included a change management plan, the establishment of a change management team, and clear initiative parameters in terms of what exactly was changing and how.

Support from organizational leaders

DND/CAF secured senior leadership endorsement for the project and the related alignment of resources by delivering important change management activities (e.g., stakeholder analysis, Transformation Steering Committee for change governance). The DND/CAF transformation team enhanced their skills in change management by administering and receiving executive coaching in leading change, providing support to leadership, and aligning changes with the project timetable^{Footnote 20}. Since not all managers had the key skills to lead in this type of transformation environment, it was important to ensure training and coaching support was available to managers as well.

Clear roles/responsibilities and governance

DND/CAF developed a Master Implementation Plan that proposed a governance model for managing the transformation. This model laid out change paths at both the organizational and individual levels, identifying them both as equally important.

Communications

DND/CAF engaged in extensive communication from leaders and the transformation team. Best practices in communication involved developing a strong communication strategy with key messages, making the information about the relocation available, accessible and tailored to intended audience, and dedicating resources to the communication. Examples of the communications developed by DND/CAF for the initiative were a dedicated Carling Campus webpage, mentions in the Guard of Honour newspaper and the Maple Leaf newspaper, the development of a Chain of Command toolkit, communications on the National Defence Headquarters (NDHQ) concourse, a liaison officer, TV screen messages and visual presentations in various DND/CAF buildings, IT capabilities to describe the campus, and the creation of an email address for Carling Campus related information requests^{Footnote 21}.

Regular monitoring of progress

The DND/CAF change management team highlighted the development of performance measure metrics for the assessment of the transformation success both at individual and organizational levels as a best practice. DND/CAF also developed a value model for HQ2020 that highlighted key initiative interdependencies, corporate opportunity and risk, and organizational practice potential, as well as the necessary activities for enabling initiative and strategic outcomes success^{Footnote 22}. As the initiative is still ongoing, measurement against these measures is still in its early stages.

Individuals' adoption of the change

DND/CAF identified several best practices in regard to adoption of change^{Footnote 23}. In particular, the team recognized that the operationalization of the change happens at the individual level. As such, the team tried to remain nimble in acknowledging and addressing the concerns of employees, understanding there was no “one size fits all” approach, and that varied, ongoing communication was crucial to keeping employees continually engaged throughout the process. It was mentioned that transformational initiatives are largely cultural transformations and the transitions need be tailored to reflect the micro-transformation level (individual) as much as the organizational one.

It was reported that the physical move to the Carling Campus initially encountered resistance and reluctance at the DND/CAF employee level, but with continuous engagement from the communication team, site visits during phase 1, and outreach efforts, those consulted for the study felt that the resistance was effectively managed and eventually resulted in positive feedback.

3.4 Relationship management

Lesson 5: To support successful relationship management, relationships should be defined and invested in early on, and be supported with ongoing effective communication and trust-building opportunities.

Relationship management should encompass all parties affected by an initiative, including the organization leading the transformation ( DND/CAF), the organizations carrying out the refit work (PSPC, SSC) and other partners, such as central agencies, and those outside the GC (vendors, municipalities and others). This was particularly true of the infrastructure aspects of the initiative due to the shared accountabilities for the refit and consolidation.

While relationship management was a challenge in the early days of the initiative, this facet has become one its key strengths. The early challenges were driven by departments working in silos and the tension stemming from the different organizational cultures. There were also challenges with respect to available capacity (i.e., skills, availability of personnel, turnover). The vendor responsible for the refit ( BGIS) prepared a lessons learned report suggested some solutions to these challenge, including improving collaboration strategies, creating an integrated organization chart of all stakeholders, and increasing verbal communication amongst stakeholders among other things.

Relationship management was greatly facilitated by co-locating PSPC, DND/CAF, SSC and BGIS team members at the Carling Campus. This co-location increased access to the members of each team, eased communications, and facilitated issue negotiation and resolution.

As well, periodic team-building opportunities played an important role in improving and maintaining strong relationships. Team-building activities included one-day team building / lessons learned workshops and social activities (e.g., summer BBQ, Christmas lunches). Part of the focus of these activities was attracting, retaining and motivating individuals to work together with a common goal over that period of time while maintaining a healthy professional morale.

Some relationship management challenges remain. For example, a Health Check report from 2017 mentioned “communication issues among the many stakeholders and large number of meetings on numerous deliverables without a common record of decision has been rated as the number one concern during the interview process^{Footnote 24}.

3.5 Outcomes management

Outcomes management is a term for the identification and tracking of the various outcomes and benefits of transformation initiatives. Success must be defined and a plan to measure progress established. Performance is then assessed before, during and after implementation.

Lesson 6: Outcomes management should be broadly defined, ownership for outcomes should be clearly assigned, and where there are interdependencies among partners for outcome achievement, these should be clearly understood. Further, achievement of outcomes should be the preoccupation of all partners. To this end, operational and strategic outcomes should be tracked regularly and inform decision making.

The refit and relocation projects of the Carling Campus initiative are an example of relatively straightforward real property projects. What is unique is the projects are being undertaken to support a complex organizational transformation within DND/CAF. As a result, outcomes management (or benefits realization) must occur at both the refit project level and the operational and strategic transformational level.

PSPC is the lead for project management and thus is responsible for determining the extent to which the refit and relocation project is on time, within scope, and within budget. DND/CAF is a consumer of the project information, and is also the lead for defining and measuring the outcomes related to the transformation.

In the case of the real property refit and relocation at the Carling Campus, the monitoring of success focused largely on the project management triangle of budget–time–scope, with a special emphasis on scope. The study found that the tracking of budget–time–scope was generally well-done.

Beyond, budget-time-scope, DND/CAF is accountable for defining the requirements that PSPC then delivered on.  As such, DND/CAF is also interested in the overall quality of the refit project relative to those requirements. This is measured by ensuring Acceptance Test Plans are consistent with Requirements Traceability Matrices and Detailed Test Procedures. These are then mapped to DND/CAF's Statements of Requirements for both accommodations and facilities, and IT Networks to identify gaps. Identified deficiencies are then to be addressed prior to occupation (or immediately after in the case of minor deficiencies)^{Footnote 25}.

PSPC, as the provider of office accommodation to the GC is also interested in occupancy costs across the entire real estate portfolio. Cost savings was identified in the Project Charter.  More specifically, it was noted consolidation at Carling Campus and release of previously occupied space would:

• enable PWGSC rationalization of its downtown real estate portfolio^{Footnote 26} and
• improve the affordability and quality of the of the government's real estate portfolio as it allows the subsequent release of low-quality, high cost spaces and contributes to the reduction target of PWGSC holdings in downtown Ottawa^{Footnote 27}

Based on the study team's review of documents for the initiative to date, cost savings have not been measured or reported (perhaps due to the fact that only phase 1 moves have taken place). However, we understand that financial updates on the initiative include “transition costs” which include factors such as unused space prior to move-in, empty space for which the GC continues to pay a lease, etc. The study team did not find fault with this approach, although the project management teams from the various departments did comment that developing these transition costs figures, which are often estimates, can be onerous.

Many assessments have been undertaken by PSPC regarding progress towards the refit project's success and DND/CAF has been conducted satisfaction surveys with employees who moved in Phase 1.

DND/CAF is accountable for achieving the operational and strategic outcomes related to the organizational transformation that would accompany the refit project, and their relocation and consolidation at Carling Campus^{Footnote 28}. These include:

• A modern workplace making smart use of affordable, interoperable tools and systems to improve networking, access to data/customer svc
• Open networked environment that enables more effective ways of working together, sharing services, information, exchanges of talent, and enhances access to government information and services
• Whole-of-Government approach that enhances service delivery and value for money by focusing on efficient and, where reasonable, consolidated operations to increase flexibility
• A capable, confident and high-performing workforce that stresses the importance of competent, engaged and productive leaders, managers and employees
• Collective evidence-based options for decision-makers

These outcomes would then lead to:

• Improved strategic decision-making
• Lead and efficient headquarters
• Improved strategic clarity, business execution, innovation, openness and trust

However, it was determined there was very little integration of the two lenses for outcome management. DND/CAF is accountable for the achievement of transformation outcomes. It is through DND/CAF's definition of requirements they ensure the refit Carling Campus will help them to achieve their desired transformational outcomes. PSPC is accountable for delivering the refit project. According to PSPC documentation (such as the Project Charter), PSPC's responsibility ends at delivering a set of buildings that meets the agreed-upon requirements.  This is a reasonable assignment of accountabilities, but there are clear interdependencies among these accountabilities.

It is the view of the study team that the achievement of end-user outcomes must be the preoccupation of all concerned. Thus, outcomes management should be broadly defined, ownership for outcomes should be clearly assigned, and where there are interdependencies among partners for outcome achievement, these should be clearly understood. Additionally, decisions must be made knowing and considering the impact of the decision on the achievement of outcomes.

3.6 Project management

Contracting

There is a long history of outsourcing real property project delivery services in the GC, also referred to as Real Property Services Management (RPSM)^{Footnote 29}. The first generation started in 1998 with the issuance of 13 contracts valued at $1.8B.

Lesson 7: Key features of construction contracts should include clear roles and responsibilities of key players and clear performance metrics for the contractor, and should also allow for scope and financial flexibility and efficient delivery.

In 2013 (the third generation of RPSM), the Real Property-2 (RP-2) contract was established for property management (and other) services for the newly-acquired Carling Campus and Tunney's Pasture^{Footnote 30}. The RP-2 contract outsources property management, project delivery services, and tenant services, among other services.

The fundamental aim of this kind of contract is to increase the efficiency of the delivery of these types of services since the successful vendor is not required to follow complex and cumbersome federal government rules and policies, as well as to download some risk from the GC to the contractor. With these types of contracts, the role of the GC is to provide “intelligent oversight” and “neutral guidance”, rather than directive management, which includes: reviewing and approving annual plans submitted by the vendor; reviewing and approving the design; brokering key decisions; and reviewing and approving milestones (linked with budget, cost, quality, and timelines).

For the purpose of the optional project delivery services for Category III projects, through which the refit and relocation projects were transacted, the RP-2 contract had some very positive features, including:

• Flexibility. The clause for optional project delivery services is very short (less than half a page) and generic. As well, there is no ceiling on the dollar amount that could be included in services delivered under this clause. All of those consulted for the study agreed that this flexibility was an advantage since the project team at PSPC could scope the work how they wished to meet the objectives of the project
• Efficiency. While the procurement of the RP-2 contract was a long process that followed the various procurement rules and regulations, the contracting of sub-vendors was much faster than the GC could have achieved since BGIS could leverage industry contracting best practices (e.g., fee structures). Reportedly, the BGIS RFPs attracted bids from large and well-respected firms. They pre-qualified 4 design bidders and 3 construction manager bidders

Contract features that might have improved the suitability of this vehicle include:

• Clear roles and responsibilities, in particular in relation to the contracting authority. Early issues were experienced with clarifying the “rules of engagement” for PSPC and other stakeholders when dealing with vendor and sub-vendors. There was general agreement among those with direct involvement in the project that the right balance was quickly found and all players are satisfied with the current level of involvement of PSPC. Failure to maintain the proper balance could result in the contract authority influencing rather than overseeing, diminishing benefit of downloading the risk to the vendor
• Performance measures for the contractor: There are no specific project delivery service key performance indicators (KPIs) built into the RP-2 contract (existing indicators are generic such as “project quality,” “project timelines” and “project cost efficiency,” among others). During the study, it was reported that the KPIs and associated baseline and benchmark performance ranges related to the refit and relocation project were still being negotiated. The result is that PSPC does not have a strong legal basis to holdback 15% of the fees for non-performance

Taking these advantages and challenges together, the study found that, in the case of the refit and relocation project, the contracting approach had more advantages than disadvantages. Many of those consulted for the study, however, felt this was largely a function of the personalities involved on the PSPC and vendor sides, rather than due to a well-designed and executed contract. Thus, in future initiatives, the selection of the contracting vehicle must consider these complexities.

Resource planning

In project management practice, resource planning is a significant challenge for project management. Projects require enough staff – even when things do not go quite according to plan^{Footnote 31}. Further, federal real property managers and staff require a concise presentation of the various considerations—ranging from principles and logic to practical advice—that are needed to deliver real property services^{Footnote 32}. The challenge of resource planning becomes more acute for transformation initiatives since the required skills are broader and include change management.

Lesson 8: Participating departments in transformation initiatives should engage in HR planning early to ensure appropriate change management and project management capacity for the full lifecycle of large and complex initiatives.

The importance of change management in informing the development phase of a transformational initiative was flagged by most of those consulted in the study. In the case of the Carling Campus initiative, developing skills and implementing formal structures within departments to address change management was a challenge for some departments in the beginning. DND/CAF and SSC hired dedicated resources to support this role within their departments. However, both organizations cited the challenges associated with finding qualified resources in change management.

The study team heard that real property expertise was strong at PSPC and DND/CAF. However, it was noted having multiple buildings under construction made the project complex from a capacity management, resources, and logistics perspective. This created some unevenness in capacity, particularly related to project management.  Stakeholders also highlighted the need for the early establishment of a dedicated Project Management Office (PMO) as part of the design phase to help get initiatives up and running quickly.

Many stakeholders emphasized the importance of having experienced and knowledgeable people involved in the project, although recognized that staff will come and go in long term projects. That said, at times the departure of key individuals meant the loss of an entire skill set or capacity (e.g., experienced project managers, corporate memory and relationship management) which significantly increased HR and competency risks. Accordingly, a project HR plan (e.g., determining the capacity of HR to undertake a project early on) should be developed in the design phase and adjusted as necessary throughout the project. HR planning includes a consideration of the available skills sets brought by vendors. Thus selecting contractors via least cost (cheapest price) may create a liability from a HR planning perspective as it does not guarantee the immediate presence of trained staff. Best value criteria, on the other hand, if designed properly, can ensure that contractors have sufficient capacity to undertake required work. 

Conclusions

The overall assessment of the lessons learned study is that the Carling Campus initiative has been and continues to be a success. The end-user ( DND/CAF) is satisfied with the extent to which the refit and relocation projects will help them meet their objectives and the refit and relocation projects are on track in terms of budget, time and scope.

The study found that there were several early “growing pains” which have been reflected in this report as lessons. In some cases, actions were taken to address these growing pains and have contributed to the success experienced. These areas include governance, oversight and change management.

In other cases, the lessons are in areas that are committed for the rest of the project lifecycle and cannot be meaningfully altered. These include the structure of expenditure approvals, the contracting approach and the availability of project managers and change management practitioners in government.

One area where further improvements could be made to support the larger transformation initiative is in outcomes management. The study found that there has been effective measurement of the progress of the refit and relocation projects against the time-budget-scope metrics, but that measurement of the transformation initiative outcomes is still in its early stages. In terms of the operational and strategic outcomes, outcomes management should be broadly defined, ownership for outcomes should be clearly assigned, and where there are interdependencies among partners for outcome achievement, these should be clearly understood. As well, it is critical that decisions be made with the resultant impact on the achievement of outcomes kept top of mind. Further, progress towards outcome achievement should be periodically reported in initiative tracking documents (where data are available).

List of Acronyms

BGIS

Brookfield Global Integrated Solutions

DND/CAF

Department of National Defence and the Canadian Armed Forces

DGISC

Director General Interdepartmental Steering Committee

EAs

Expenditure Authorities

GC

Government of Canada

GGI

Goss Gilroy Inc.

HR

Human Resources

HST

Harmonized Sales Tax

IT

Information Technology

KPIs

Key performance indicators

MOU

Memorandum of Understanding

NCA

National Capital Area

NDHQ

National Defence Headquarters

PMO

Project Management Office

PSPC

Public Services and Procurement Canada

RP

Real Property

RPSM

Real Property Services Management

SPAC

Senior Project Advisory Committee

SSC

Shared Services Canada

Appendix A: Methodology for the Study of Lessons Learned

The study was undertaken in four main phases: planning, examination, analysis and validation, and reporting.

Phase 1: Planning

Start-up-Meeting

A meeting was held on February 21st 2018 between GGI and representatives from the PSPC evaluation branch to discuss the background and approach to the review. Documentation was identified and sent to GGI shortly after the meeting.

Preliminary review of documents

After the start-up meeting GGI conducted a document preliminary review of several key documents to gain a more in-depth understanding of the Carling Campus initiative.

Site tour

On March 23, 2018, GGI also attended a tour of the DND/CAF Carling Campus at 60 Moodie Drive. In attendance for this tour were members of the PSPC evaluation branch, the GGI consulting team, and staff from the DND/CAF and SSC. The tour of the facilities was conducted by the Carling Campus Project Director of Real Property Services (PSPC) and his team of project managers. It included a tour of both completed facilities and areas still under construction. This helped to t shed light on the process and phases involved in the construction (wiring, communications, security, etc.).

Methodology Report

Based on this preliminary work, a methodology report was developed that outlined the approach to the lessons learned study.

Instrument design

In order to capture stakeholder perspectives about the unfolding of different aspects of the relocation initiative, GGI developed an interview guide to find out what did and didn't go went well and what could/should be done differently in the future.

Phase 2: Examination

Key informant interviews

The examination phase included the conducting of interviews with key players and stakeholders of the initiative at PSPC, DND/CAF, SSC and Treasury Board Secretariat, as well as representatives of private sector entities involved in the initiative (vendors and consultants). These were officials from government departments and agencies who played key roles and were able to share in-depth qualitative information on lessons learned to date. A total of 22 interviews were completed, with 26 individuals from a variety of stakeholder groups:

• PSPC: This included interviews with members of the PMO and the Real Property Services Directorate who could speak to the approvals process, funding approaches, and governance/accountability
• DND/CAF and SSC: This included interviews with individuals who are knowledgeable of the initiative, had regular interactions with the PSPC PMO and were active and involved members of their respective organizations within the Carling Campus project team
• Treasury Board: This included interviews with representatives of the Government Operations Sector who could comment on the various submissions to and approvals as well as representatives of Acquired Services and Assets Sector regarding policies affecting the initiative
• Vendors and external consultants were also consulted to provide an overall view of the program and its day to day operations (initiative scope, governance/roles, initiative management and relationship management)

The majority of interviews were conducted in person. GGI consultants lead the interviews, and at times, members of the PSPC evaluation team were present for the interviews. Findings were compiled in an evidence matrix.

Review of documentation

Throughout the study, GGI received a number of documents related to the relocation initiative. Some were provided by the project authority, others were provided by participants from the different departments, prior to or following their interview. Approximately twenty to twenty-five documents were reviewed in depth and coded against the study questions/areas of exploration. Findings were compiled in a document review evidence matrix.

Data collection workshop

GGI had originally intended and planned to conduct 2 workshops, one to solicit views from all affected stakeholders (including PSPC, DND/CAF, SSC and Treasury Board Secretariat); and a second one for the purpose of validation, after the completion of the data collection phase and the compilation of findings into preliminary lessons learned. In the end, due to scheduling and coordination complications over the data collection period, it was deemed preferable by GGI and the project authority to limit the number of workshops to a single, post-data collection, findings validation workshop (see validation workshop discussion below).

Phase 3: Analysis and validation

To conduct the analysis, the study team met several times to discuss the main findings and identify the lessons. As a result a presentation of preliminary lessons was completed. Validation of the preliminary lessons was completed using the following approaches:

Presentations to senior committees

GGI shared preliminary findings with the following committees:

• August 28th, 2018: Director General Interdepartmental Steering Committee
• September 14th, 2018: The Senior Project Advisory Committee
  Members of each committee posed questions and provided their advice regarding additional level of details or areas requiring clarification

Findings validation workshop

The validation workshop was held after incorporating comments from the senior committees. In preparation for the workshop, the team prepared a presentation deck and a one-page handout about the main lessons learned. The workshop included participation from PSPC, DND/CAF, and SSC. In addition, a separate follow-up findings validation interview was conducted with a vendor representative since they were not able to attend the workshop.

Phase 4: Reporting

GGI developed 2 main deliverables as part of the study. The first was a presentation of preliminary lessons that was developed during the validation phase. The second was a final report (this deliverable).